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Corrections Corporation of America Message Board

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  • tubo55 tubo55 Dec 23, 1999 9:04 PM Flag

    is anyone here bullish

    Thank you for your compliment and your comments.

    Are people concerned because of the low stock price, or because they believe the company could go under?

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    • I can't speak for others but if I had to develop
      a worst-case scenario for a new investor it would
      be as follows:

      You buy Monday at $5.75.
      Blackstone announces later that week they've put in $300mm
      at $5. California never gets fixed. Interest rates
      keep going up. Some good Wardens quit out of disgust.
      Prison Operations problems increase. One year later
      we're a $3 stock. Blackstone buys the rest of the
      company for $4.

      I think that's the ultimate
      downside from here. While that downside doesn't look that
      bad (considering I think we could be a $14 stock in a
      year if alot of things went well) you have to remember
      that the current shareholders are tapped-out,
      pissed-off and run-down so there is no buying pressure
      coming from us. Plus, the tax-loss selling is vicious
      and will continue through next Friday unless there is
      a favorable announcement.

      That leaves
      potential New investors who I think are (correctly) taking
      the position that they want to see Blackstone's terms
      before they make a committment.

      As far as fear of
      BR, I don't think even our worst detractors believe
      that's a possibility. If Blackstone fell through we'd
      just stop all capital expenditures, cut the dividend
      to Litt's $1.50 - $1.60 and maybe deREIT. Probably
      would be a $3 stock for a while but no BR. JMO.

 
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